1. Field of the Invention
This invention generally relates to the field of draft protection and more specifically to obtaining information of an issued draft from print stream data and alerting the drawee of the draft that the draft has been issued.
2. Description of Related Art
A “draft” is a written instruction to pay money and signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative. Each draft identifies a “drawee,” the party on which an order for the payment of money is drawn and a “drawer,” which is a person who signs or is identified in the draft as a person ordering payment. A “check” is a type of draft that is payable on demand and has a bank as its drawee.
Check fraud has been an ongoing problem since the use of checks began. Check fraud continues to increase at an alarming rate. Losses from check fraud are currently estimated to be over $10 billion annually. When determining liability, many courts look to see whether the banks have instituted fraud protection services/devices.
To combat check fraud, banks have instituted anti-fraud features, such as adding graphics, codes, color fibers, fluorescent fibers, micro printing, watermarks, and other authenticators to the check stock and/or background. These features help prevent and/or identify duplications of an original check. However, technology present in readily-available consumer electronics, such as photo-copiers, computers, and non-impact printers has kept pace with most currently-implemented anti-fraud security features used on or in conjunction with checks. Therefore, the previously-described security features printed in the check background are no longer effective because the forgers have access to the same basic check stock as the account holder and can closely reproduce the security features.
A recent innovation in banking security is a system commonly referred to as “Positive Pay”. With Positive Pay, an account holder notifies the drawee (the banking institution i.e., one that draws, especially one that draws an order for the payment of money.) of the issuance of a check immediately after the check has been issued. A banking institution cooperating with a client under the Positive Pay system will only accept or pay checks that are pre-authorized. Creating fraudulent checks becomes useless under the Positive Pay system because the defrauder isn't able to register the counterfeit checks. Additionally, the system is not dependent on a teller identifying authenticators, such as those mentioned in the preceding paragraph.
However, most accounting software does not have the capability of automatically notifying a banking institution when a draft has been printed and/or issued. To add the feature, the software program would have to be customized to give it the ability to extract the required information from the accounting system and to transmit this information to a bank. One would have to re-key the software to support this functionality. Writing custom software to extract this information is very difficult, since most accounting software stores pieces of check information in multiple databases. Therefore, creating custom software is neither economical, timely, nor error proof. What is needed is a way to notify a bank of an issued draft without the need to customize third party and other types of accounting software.
Therefore, a need exists to overcome the problems with the prior art as discussed above.